This research program focuses on genetic controls of mammalian development and disease. The program combines established transgenic methodology and embryo manipulation with the most advanced technology of gene targeting by homologous recombination in embryonic stem cells. This technology is used for creating mice carrying precisely engineered mutations in genes affecting fundamental developmental processes. The same genes are known or suspected to be involved in human genetic diseases and in cancer. We propose to investigate (i) the role of the extracellular matrix in morphogenesis, tumor progression and metastasis; (ii) the effect of DNA methylation on embryonic development, genomic imprinting, X inactivation, cancer incidence and the process of aging; (iii) the role of the Wilms tumor gene in urogenital development and in tumorigenesis; (iv) the molecular and biological basis of neural crest and muscle development. The need for refining and advancing the existing embryonic stem cell technology becomes apparent when analyzing embryonic lethal mutations because their study provides little or no information on the role of the mutated gene in later developmental processes. This may be particularly significant for the study of tumor suppressor genes suspected of acting in postnatal life. To overcome these limitations, we propose to generate mice which express a mutation in a specified lineage only. First, we propose to develop the technology of inserting very large fragments of DNA carried on yeast artificial chromosomes (YACs) into the germ line. This technology would allow for molecular complementation.of mouse mutations and may help in positional cloning of disease genes, one focus of the current genome project.